XML 86 R15.htm IDEA: XBRL DOCUMENT v3.19.3.a.u2
Leases
12 Months Ended
Dec. 31, 2019
Leases [Abstract]  
Leases

Note 7—Leases:

In December 2011, the Company entered into a non-cancelable operating lease for office space in Los Angeles, California, which lease was subsequently amended in November 2012, December 2013, March 2014 and July 2015, and December 2017.  The initial term of the lease was for seven years and commenced on December 10, 2011. As amended, the Company rents approximately 65,656 square feet.  The term of the lease runs until March 2026, and rent amounts payable by the Company increase approximately 3% per year.  Concurrent with the execution of the lease, the Company provided the landlord an automatically renewable stand-by letter of credit in the amount of $2.5 million.  The stand-by letter of credit is collateralized by a high-yield savings account which is classified as restricted cash on the accompanying consolidated balance sheets.    

 

In June 2012, the Company entered into a long-term lease agreement for office space in South San Francisco, California, which was subsequently amended in May 2014 and July 2015. As amended, the Company rents approximately 29,470 square feet.  The term of this lease runs until March 2026, with the option to extend for an additional five-year term, and rents payable by the Company increase approximately 3% per year.  The Company provided the landlord an automatically renewable stand-by letter of credit in the amount of $1.6 million.  The stand-by letter of credit is collateralized by a high-yield savings account which is classified as restricted cash on the accompanying consolidated balance sheets.

The Company also leases copier equipment for use in the office spaces.  Components of lease expense include fixed lease expense and variable lease expense of approximately $4.7 million and $0.4 million, respectively, for the year ended December 31, 2019.  Rent expense for the years ended December 31, 2018 and 2017, was approximately $4.7 million and $3.9 million, respectively.  For purposes of determining straight-line rent expense, the lease term is calculated from the date the Company first takes possession of the facility, including any periods of free rent and any renewal option periods that the Company is reasonably certain of exercising.  The Company’s office and equipment leases generally have contractually specified minimum rent and annual rent increases are included in the measurement of the ROU asset and related lease liability.  Additionally, under these lease arrangements, the Company may be required to pay directly, or reimburse the lessors, for real estate taxes, insurance, utilities, maintenance and other operating costs. Such amounts are generally variable and therefore not included in the measurement of the ROU asset and related lease liability but are instead recognized as variable lease expense in selling, general and administrative costs in the consolidated statements of operations when they are incurred.  

 

The maturity of lease liabilities as of December 31, 2019 were as follows (in thousands):

 

 

 

Amount

 

2020

 

$

5,207

 

2021

 

 

5,365

 

2022

 

 

5,483

 

2023

 

 

5,631

 

2024

 

 

5,805

 

Thereafter

 

 

7,491

 

Total

 

$

34,982

 

Less: imputed interest

 

 

(9,715

)

Total lease liabilities

 

$

25,267

 

 

 

 

In February 2019, the Company entered into a long-term sublease agreement for 12,429 square feet of the office space in Los Angeles, CA.  The term of the lease runs until March 2026, and rent amounts payable to the Company increase approximately 3% per year.  The Company recorded operating sublease income of $0.2 million for the year ended December 31, 2019 in other income (expenses) in the consolidated statements of operations.

 

The future minimum lease payments to be received as of December 31, 2019 were as follows (in thousands):

 

 

Amount

 

2020

 

$

416

 

2021

 

 

467

 

2022

 

 

481

 

2023

 

 

495

 

2024

 

 

510

 

Thereafter

 

 

659

 

Total

 

$

3,028

 

 

Supplemental cash flow information related to leases for the year ended December 31, 2019:

 

Operating cash flows from operating leases (in thousands)

 

$

5,438

 

Right-of-use assets obtained in exchange for new operating lease liabilities

 

 

 

Weighted average remaining lease term (in years)

 

 

6.2

 

Weighted average discount rate

 

 

10.9

%